What is an Operational Plan?
An operational plan describes how the company or organization will achieve the goals, objectives and strategies described in the larger strategic or business plan. The operational plan includes all actions that are needed to meet the strategic plan objectives, personnel responsible for carrying out the described actions, and the timing, costs and KPIs (key performance indicators) that align with these actions. The operational plan must be reviewed and updated regularly to ensure that the company is meeting outlined objectives.
Sample Business Operation Plans
As with our other examples, for our first sample we are going to use our fictional company, Terra Engineering for this operations plan example. To view full business plan samples, please see our samples page here.
Operation Sample Plan #1
The following section will identify the proposed operational plan for Terra Engineering. Included are the general operating procedures, human resources, insurance, and working capital requirements of the business. Also included is a table outlining the office space requirements, asset acquisition and an outline of Terra Engineering's operational workflow.
Terra Engineering Operational Plan
General Operating Hours
Terra Engineering intends to operate Monday thru Friday from 9 am to 5 pm. Terra Engineering will be operational year round.
Mr. Johnson and Mr. Smith will be the sole employees of Terra Engineering for the first two years of operation. When additional human resources are needed, Terra Engineering has identified the persons qualified and able to assist on a contract basis for the same rate as the owner. They include:
Mr. Wes Aaron, and environmental engineering technician will be sub-contracted to complete work as needed. It is estimated that Mr. Aaron will eventually be hired full time by Terra Engineering once demand warrants growth.
Mrs. Leanne White holds a Masters in Environmental Engineering and will also be sub-contracted to perform work for the company. Eventually, Terra Engineering intends to hire Mrs. White full time.
Mr. Charles Pearson holds a Bachelors of Science Degree in Environmental Engineering and has a vast technical experience base in the environmental assessment area and will be retained when needed.
Once the business reaches 60% of its operational capacity this will represent 1300 hours, Terra Engineering will offer the above environmental professionals full time positions. Also at this time, an administrative assistant will be sought.
A professional user of Auto Cad will be sought to perform various jobs for the company. It is unknown at this time who will fill this position, however, job advertisements will be put in the local papers and organizations to attract a good pool of respondents.
Once hired, all employees will be covered by the Workers Safety and Insurance Board and covered for Employee Benefits.
Terra Engineering will have to incur costs for business liability insurance. The estimated cost for this requirement is $4,000 per year.
Operating Capital Requirements
Due to the demands imposed at start up, Terra Engineering will require that the business have sufficient working capital to meet all operational responsibilities of the business for the first three months.
It is estimated that the business will need approximately $20,000 in working capital to sustain and ensure the business meets all opening and on-going financial obligations.
Also, throughout the year there tends to be periods of low activities. Consequently, the company will experience financial pressures during these months. While much of this time will be spent developing proposals and marketing strategies, there will be a need to maintain sufficient working capital to cover these periods.
A long term strategy to maintain a positive cash flow during these periods will be to diversify the company and develop environmental training programs for certain communities. These training programs will be given during these months.
Office Requirements and Asset Acquisitions
Terra Engineering will lease office space on located at:
459 Duncan Avenue, Suite 1003
The office space is leased and will accommodate the necessary office equipment such as computers, fax machine, photo copier, and other engineering equipment. This facility will require an estimated $5,000 to renovate in a style that is aesthetically pleasing to the clients as well as the owners.
These facilities will be leased at $500 per month. In addition, Terra Engineering will require specialized environmental equipment. These are the estimated costs associated with those investments:
- Office Renovations $5,000
- Office Equipment and Furniture $6,000
- Specialized Field Equipment $27,000
- Specialized Software $10,000
- Total Capital Costs $48,000
The above noted capital purchases will increase work effectiveness, enhance professionalism and will prepare the business for the forecasted demand for services. Further, the equipment may be leased out to partner associates during times of low activity.
As with any consulting firm, the operational workflow for the business is quite uniform and simple to follow. The following is a step by step outline of how contracts are completed on a regular basis:
- Step 1 Terra Engineering will respond to a request for proposal (RFP) with a professionally prepared proposal for service;
- Step 2 At this point, the potential contract is awarded to either Terra Engineering or other companies which submitted proposals for services. Therefore, communication is made by the contract to the successful consulting firm. If Terra Engineering is successfully selected to perform the work, the contract is then triggered to begin;
- Step 3 Terra Engineering will collect a deposit from the client and will begin the project. Deposit values vary depending upon the size and location of the project;
- Step 4 Terra Engineering will go ahead and start the project while keeping communication with the client. Once the project reaches 60% - 70% completion, funds will be given to the business by the client to complete the rest of the work;
- Step 5 Once the work is completed to the satisfaction of both, Terra Engineering and the client, the final payment for the contract will be made.
The above operational workflow is very standard, easy to understand and within industry's norm.
Terra Engineering will accept cash, cheque and visa payments. These payments are well within industry standards. The business will provide credit to larger account holders.
It is estimated that the length and terms of payments are net 30 for all clients. This will allow the business to avoid cash flow problems. Late payment charges are 2% of the projects outstanding balance.
Operational Plan Sample for a Restaurant
Bob's Restaurant will be open 7 days a week for lunch and dinner requiring multiple shifts. Susan will write the schedules. The schedules will be written in a manner that enable her to increase or decrease the hourly labor needed according to sales volume for optimal labor cost control.
Proper rotation and labeling techniques, plus a "right sized" storage facility will ensure that high quality prepared products will be available to support peak demand and business hours. During off-peak hours activities geared toward replenishment and ongoing preparation will take place.
Susan Smith will do all of the receiving, inventory maintenance and ordering and ensure there is alignment with customer demand. The schedules for ordering will be set up to ensure maximum freshness, such as ordering several times each week. Standard supply and grocery foodservice orders will arrive with lower frequency, according to a schedule that takes into account storage capacity and the needs of the restaurant.
Ms. Smith will use pre-determined operational checklists to ensure that the requirements for every shift align with business requirements. The checklist will also ensure that the operational standards of the restaurant are met after work, during business hours and before each shift.
The layout of the front of the house and back of the house has been designed for flexibility and efficiency. The layout takes into account peak customer demand and traffic.
When guests arrive, they will be greeted inside the front door by a server or assistant manager. They will immediately be asked for seating preference. Guests will be immediately offered a complimentary roll and asked for their drink and food preferences.
The ticket will print at the grill area and will be used to by the cook to track orders and then to confirm the cooked order matches the customer request. It will then be placed under a heat lamp until the full order is complete and ready to be served.
The kitchen is organized to be operated by a maximum of 4 cooks and 1 line cook. At each shift change, staff will engage in restocking, cleanup and reparation. Each shift will settle all financial transactions at the end of the shift. The last shift of the day will be responsible for implementing the closing requirements outlined on the closing checklist. The restaurant will not close until it is completely ready for the start of the next business day.